THE RUPEE: sliding trend in currency market

05 Mar, 2004

The rupee on Thursday continued its fall versus the dollar in the open market, losing five paisa more for buying and selling at Rs 57.55 and Rs 57.65 respectively.
Rising demand for dollars in the interbank market pushed the rupee value down, dealers said.
During the coming days, they, however, predicted that the local currency would move both ways in relation to the dollar.
The local currency followed suit and lost 34 paisa versus the euro for buying and selling at Rs 70.34 and Rs 70.64.
In the world markets, the dollar performed well versus the leading currencies on expectations that the US economy might improve in the coming days, dealers said.
Commenting on the next move by the European Central Bank, market analysts said that the bank was likely to adopt a wait-and-see attitude in its meeting.
The single European currency's value has risen about 50 percent versus the dollar from its October 2000 low, making the European exports more expensive as compared to the other foreign competition, experts said.
They also said that lower interest rate would not only boost the European economy, but would also curb the euro's surge versus the leading currencies.
According to a report, the US monitoring team visited China several times, and urged it to think about currency policy.
In the meantime, it is interesting to note that in the past, China has shrugged off such ideas over the currency policy.
Seemingly, it looks that the Bush administration is facing some sort of problems by the politicians ahead of the US general elections.
The US politicians are continuously trying to convene the US administration to take urgent steps against China's currency policy.
China had pegged the yuan at 8.28 per dollar since 1994.

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Kerb Buying Rs 57.55
Kerb Selling Rs 57.65
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Interbank closing rates for dollar on Thursday.

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Buying Rs 57.34
Selling Rs 57.37
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Repo Rates (Yield p a)
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Tenor Low Bid High Bid Low Offer High Offer Average
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Overnight 0.20 0.40 0.50 0.60 0.43
1-Week 0.30 0.40 0.40 0.60 0.43
2-Week 0.40 0.60 0.80 1.00 0.70
1-Month 1.00 1.15 1.30 1.35 1.20
2-Month 1.20 1.35 1.50 1.60 1.41
3-Month 1.30 1.45 1.55 1.60 1.48
4-Month 1.40 1.50 1.70 1.90 1.63
5-Month 1.45 1.55 1.75 2.00 1.69
6-Month 1.50 1.60 1.80 2.00 1.73
9-Month 1.80 2.00 2.20 2.40 2.10
1-Year 2.00 2.20 2.40 2.60 2.30
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Call Rates (Yield p a)
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Tenor Low Bid High Bid Low Offer High Offer Average
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Overnight 0.30 0.50 0.60 0.80 0.55
1-Week 0.40 0.60 0.80 1.00 0.70
2-Week 0.50 0.70 0.90 1.10 0.80
1-Month 1.10 1.25 1.40 1.50 1.31
2-Month 1.30 1.50 1.70 1.90 1.60
3-Month 1.35 1.50 1.70 1.90 1.61
4-Month 1.50 1.70 1.90 2.10 1.80
5-Month 1.40 1.60 1.80 2.00 1.70
6-Month 1.60 1.70 1.90 2.10 1.83
9-Month 2.00 2.20 2.40 2.60 2.30
1-Year 2.20 2.40 2.60 2.80 2.50
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The dollar commenced trading at Rs 57.50 and Rs 57.60 as its buying and selling rates, respectively. With the increase in greenback's demand, its rate started moving up and finally it was closed at Rs 57.55 and Rs 57.65 on buying and selling counters, respectively, against Wednesday's closing rates of Rs 57.45 and Rs 57.55, the dealers said.
The rupee maintained upward trend against the pound sterling. The pound's buying rate declined from Wednesday's closing rate of Rs 105.70 to Rs 105.40 while selling rate moved down from Rs 106.00 to Rs 105.70, the dealers added.
The dollar opened at Rs 54.40 (buying) and Rs 54.50 (selling) against the last rates of Rs 57.30 (buying) and Rs 57.40 (selling). It did not observe any further change in the evening session and closed at Rs 54.40 (buying) and Rs 54.50 (selling).
Pound sterling opened at Rs 105.50 (buying) and Rs 105.70 (selling) against same previous rates. It did not observe any further change in the second session and closed at Rs 105.50 (buying) and Rs 105.70 (selling).
Canadian dollar opened at Rs 43 (buying) and Rs 43.20 (selling) against the same overnight value. It did not observe any further change in the evening session and closed at Rs 43 (buying) and Rs 43.20 (selling).

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